Under the contract with Northern Dynasty Minerals, an affiliate of First Quantum will subsequently execute an option agreement.
The option agreement is valid for a period of four years, with the right to extend the term by a further two years.
For the initial four years, First Quantum will pay an option price of $150m in equal tranches of $37.5m.
The total option price will be directed towards advancing the permitting process for development of the Pebble project.
First Quantum Minerals chairman and CEO Philip Pascall said: “The option agreement is an important opportunity to carry out a detailed assessment of the Pebble Project, which is widely acknowledged to be one of the outstanding unmined copper projects in the world, estimated to contain some 26 million tonnes of copper, 70 million ounces of gold and 1.5 million tonnes of molybdenum in measured and indicated resources at a 0.3% copper equivalent cut-off.
“We are very aware of the environmental and social sensitivity of this project and will utilise the lengthy option period to apply our extensive project development and operating experience to ensure that this project can be developed with the support of stakeholders.
“We believe a successful outcome to the permitting process for Pebble would deliver the potential for further growth in copper for First Quantum well into the future.”
In order to earn the 50% stake in the project, First Quantum’s affiliate is required to invest an additional amount of $1.35bn in the Pebble Limited Partnership.
Closure of the transaction is subject to due diligence, receipt of necessary regulatory approvals and successful negotiation of the final form of the option agreement and related commercial agreements.
Finalisation and execution of the agreements are expected to take place in the second quarter of next year.